Usman Salis
The euro's attempt to recover against the U.S. dollar has stalled, once again meeting strong selling pressure near the 1.1700 level. This failure to push higher reinforces the current negative sentiment, leaving the pair vulnerable to further declines as it approaches a key technical support level.
Key Levels
Rejection at ResistanceThe recent price action confirms the bearish technical framework, aligning with the earlier IB-forex analysis. The pair was cleanly rejected from a major supply zone between 1.1650 and 1.1700, an area containing a significant order block and a Fair Value Gap.
This level has proven to be a consistent barrier, attracting institutional selling.
Chart Analysis
Bearish Structure in PlayFollowing the rejection, the pair has declined and is now testing a crucial support level at 1.1540. The market structure of lower highs and lower lows remains firmly intact, indicating that sellers are in control. The fundamental outlook supports this technical weakness. A strong U.S. dollar, driven by the Federal Reserve's commitment to higher interest rates, continues to overshadow the euro.
Fundamental Backdrop
Dollar Strength PersistsAs the Eurozone faces economic challenges, this policy divergence creates a persistent headwind for the single currency. The market's focus is now on whether the 1.1540 support will hold. A decisive break below this level could open the path for a steeper decline toward the 1.1500 psychological handle.
What's Next? Scenarios and TargetsThe bearish bias remains valid as long as the price trades below the 1.1650 resistance zone. For the current downward momentum to be challenged, buyers would need to force a sustained move above 1.1700.
Key Levels to Watch:
- Resistance: 1.1650 - 1.1700
- Support: 1.1540
All eyes are now on the 1.1540 support level. A decisive break below this threshold would confirm the strength of the bearish momentum and likely trigger an extension of the decline toward the 1.1500 psychological level, and potentially lower. While temporary bounces are possible in any market, the overall technical structure favors continued downside pressure. For the current bearish outlook to be invalidated, buyers would need to reclaim control by pushing the price back above the 1.1700 resistance zone—a move that currently seems unlikely without a significant shift in fundamental drivers. The path of least resistance remains downward, and traders should monitor price action around the 1.1540 level for the next directional cue.
Usman Salis
